17/12/14

HON’BLE JUSTICE MR. KALIDAS MUKHERJEE, PRESIDENT        

            This order relates to hearing on the point of admission.

            The complaint has been filed by Great Eastern Energy Corporation Ltd. against the OP Oriental Bank of Commerce alleging that on May 11, 2011 the Complainant entered into ‘gas sale and purchase agreement’ for sale of CBM Gas with one SRMB Srijan Ltd.  Pursuant to the execution of the agreement between the Complainant and SRMB Srijan Ltd., especially clause 11.5 thereto, the said SRMB Srijan Ltd. instructed its Banker, the OP herein, to issue a bank guarantee for an amount of Rs.93,18,728/-.  The OP Bank issued a bank guarantee for the aforesaid amount in favour of the Complainant which was valid till July 24, 2012.  Subsequently, the said bank guarantee was valid till May 31, 2014.  The subject matter of the instant complaint relates to the bank guarantee for the amount of Rs.93,18,728/- which was valid till May 31, 2014.  The OP had undertaken to pay the Complainant merely on demand and without any previous notice or records to the said SRMB Srijan Ltd, the assured sum of Rs.93,18,728/-.  The OP Bank by letters dated 04/06/14 and 05/06/14 informed the Complainant that the encashment of the Bank guarantee could not be acceded to.    Accordingly, the Complainant through his Learned Advocate issued a letter dated 29/09/14 to the OP seeking compensation for the deficient services.  For the said reason, the complaint was filed before this Commission with the prayer for damages and compensation amounting to Rs.93,18,728/-.

            The Learned Counsel for the Complainant has referred to the decision reported in AIR 2000 SC 62 [Union Bank of India vs. M/s Seppo Rally OY & Anr.].

            We have heard the submission made by Learned Counsel for the Complainant.  Firstly, it appears that the Complainant is a Company which entered into an agreement with SRMB Srijan Ltd. for gas sale and purchase.  In connection with such agreement under the instruction of SRMB Srijan Ltd. its Banker, that is, the present OP Bank issued bank guarantee to the tune of  Rs.93,18,728/-.  Evidently, the Complainant is engaged in commercial activity and in connection with that the bank guarantee was issued by the OP in favour of the Complainant under the instruction of SRMB Srijan Ltd.  The Learned Counsel for the Complainant has submitted that the matter in issue in this complaint case is the deficiency in service on the part of the OP Bank in connection with the said bank guarantee.  We are of the considered view that the bank guarantee was issued by the OP Bank in connection with the business of the Complainant Company with SRMB Srijan Ltd. and it cannot be viewed separately.  Since it is the commercial activity of the Complainant Company, it cannot be said to be a consumer u/s 2(1)(d) of the C. P. Act, 1986. 

            Secondly, the amount of Bank guarantee being the value of services together with the compensation and damages of Rs.93,18,728/- is beyond the pecuniary jurisdiction of this Commission and, as such, the complaint is not maintainable. 

            The complaint is dismissed being not maintainable.